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What

Shares of Rayonier Advanced Materials (NYSE:RYAM), a manufacturer of high-purity cellulose used in cigarette filters, paints, pharmaceuticals, and foods, among other products, are getting slammed after the market wasn't satisfied with fourth-quarter results -- the stock is down 20% as of 2:30 p.m. EST.

So what

Sales during the fourth quarter checked in at $231 million, down from the prior year's $242 million result. Comparable results were down across the board, including declines in operating income and net income, and earnings per share checked in at $0.18 per share, down significantly from the prior year's $0.30 per share. The culprit behind the company's struggles was easy to find: pricing headwinds. Despite a slightly challenging year, Rayonier put a positive spin on things. 

"Our employees' execution against our 2016 objectives delivered impressive financial and operational results," said Paul Boynton, chairman, president and chief executive officer, in a press release. "Our focus on transforming our business yielded significant improvements in our cost position and our efforts to reposition our balance sheet provide a foundation for future growth initiatives."

Now what

Unfortunately for investors, pricing headwinds look to persist in the near term. Management anticipates cellulose specialties prices to decline another 3% to 4% from 2016 levels. In hopes to help offset pricing headwinds, the company has achieved $85 million in cost improvements, with $50 million of that taking place during 2016. The company hopes to improve costs by another $50 million total over the next two years. Until prices rebound or management proves it can more than offset the headwinds, investors shouldn't expect a quick rebound after today's drop. 

Daniel Miller has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.